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Tuesday, 24 July 1906

Mr McDONALD (Kennedy) .- The honorable member for Barrier, as well as the members of the Shipping Service Commission, of which he wasthe chairman, may, I think, be very well satisfied with the report they have presented, when they take into consideration the criticisms which have been levelled against it. The only serious attempt to criticise that report was that made by the Age newspaper, and the honorable member for Barrier, when speaking the other day, flattened that criticism out in such a way as to afford sufficient justification for the decision arrived at by the Commission. I may say in passing that it has taken the proprietors of the Age a couple of issues to gracefully retreat from the position taken up by that newspaper in criticising the report. There has, in fact, been no criticism of the report to which any member of the Commission can take exception. If it had been possible to criticise it severely, honorable members of the Opposition, the section of the press opposed to the nationalization of the shipping and other industries, and especially the antiSocialists, would have taken a stronger stand against it than they have done up to the present. One matter connected with the criticism of the report to which I should like to refer, is the fact that a letter was published in one of the newspapers, over the signature, I think, of Mr. Kenneth Anderson, who made a very strong point of the fact that the members of the Commission arrived at conclusions which are, in his opinion, erroneous, and which he thinks they would not have arrived at had they seen, as they might have done, the balancesheets of the Orient Company. I mention this matter now in order that the position of the members of the Commission may be clearly explained. It is true that we had an opportunity to see the balance-sheets of the Orient Compan, but it is also true that it was proposed that if we tookadvantage of that opportunity we should keep secret what we had seen. We distinctly stated at the time that the Commission was not formed to pry into the private affairs of any company doing business in Australia. We were conducting our investigation in the public interest, and desired that any information we obtained should be made known to the public. Consequently, we declined to see the balance-sheets of the Orient Company on the condition suggested.

Mr Wilks - Does the honorable member not think that what was desired was that the information should not come to the knowledge of rival companies?

Mr McDONALD - I am not suggesting that that was not the object of the condition imposed, but Mr. Kenneth Anderson, no doubt inadvertently, makes the statement to which I have referred, without thinking for the moment of the reason we had for not inspecting the balance-sheets of the company. It is quite possible that he did not desire that the private affairs of the company should become known to those conducting rival companies, but it was because we would be unable to publish the information obtained that we declined to inspect the balancesheets of the Orient Company. I make this statement in order that members of the Commission may be put right in connexion with the somewhat important objection raised by Mr. Kenneth Anderson in his criticism of their report. I may further say, so far as Mr. Andersonis concerned, that no one connected with the oversea shipping industry treated the Commission more courteously, and proffered more information to assist them in carrying on their inquiry, than he did. I regret to have to say that in Victoria, in New South Wales, and even in Queensland, a better public spirit was not exhibited, that greater interest was not taken in the work of the Commission, and that a. larger number of the public men connected with the shipping industry were not prepared to come forward to give evidence. In some cases we actually had to drag it out of them. In one case it was not until we had virtually threatened to summons an individual that we were able to get any information from him, and when it was supplied it was of a very meagre character. I think it is just about time that the Commonwealth dealt in a definite way with the huge shipping ring which now dominates, not only our oversea trade, but also our coastal trade. Each year the shipping ring which is controlling our oversea trade is becoming more powerful, and it is only a question of time when, if some step be not taken to check its actions, it will have the producers, of this country practically in its hands. It is for that reason we think that it is in the public interests that a Common wealth line of steamers should be run. I do not propose to dwell long upon these particular matters. First of all, let me dwell upon one important case which is referred to in paragraph 14 of the report. It goes to show that if certain consignments - and it refers more particularly to the fruit trade - are not sent through the shipping companies, and sold by certain agents whom they dictate, the combine will not, carry the fruit at all. Where a company dictates, not only the particular line of vessels by which fruit shall be carried, but also the particular agents through whom it shall be sold, I think that, from the stand-point of the interests of our producers, it is carrying things a little too far. Furthermore, we are told in this paragraph that had the shippers a free opportunity To sell bv such agents as they desired, or 'by whatever method they desired, they would be in a position to save not less than is. 6d. per case on their fruit. In Adelaide this monopoly practically has the fruit trade at its mercy, and could ruin it at any moment if it thought proper. That is a very serious state of affairs, and certainly it is one which ought not to be allowed to exist. I do not intend to read this particular paragraph, as it is rather long, and it may be referred to by honorable members if they choose. In Brisbane we had evidence from Mr. T. C. Beirne, a very large importer, in which he pointed out that owing to the combine's practical monopoly of the oversea trade, those who require certain goods at special seasons are virtually at its mercy, and have to pay whatever charges it thinks proper to impose. In one case to which he particularly referred, he did not know until the goods were actually landed at the wharf that there was going to be an increase of about ros. or £1 in the freight. He also told us that in the hands of these companies the power of the rebate system is so strong that, owing to the broker who used, to handle the goods he sent to Brisbane having once shipped a consignment of goods to South Africa by a line of vessels that was outside the ring, he was threatened with the loss of his rebates. It is an extraordinary thing that irc such a case the combine can say to a marc that if his agent, who is also agent for a large number of firms doing a similar class of business,, should send a. particular shipment, even without his knowledge, by an outside line of vessels, he shall lose his rebates,, which may amount to any sum from. £10, or £20, up to £200 or £300. That is a very serious state of things. It. prompted us to suggest that the sooner thecombine "was broken down the better, and; we are of opinion that the only way in which that can be -done is. by establishing a. national line of steamers. Let me point out another action of the combine. From. Brisbane, Townsville, and Rockhampton a very large consignment of meat is shipped.. For some years it was carried by boats that proceeded bv the northern route to Great Britain. There was a feeling prevailing; that the prices charged were rather high, A new line of boats - I think it was theAberdeen line - came upon the scene, and competed for this trade. But the combination which is conducted in Queensland! ports principally by the British-India Company, was so powerful that, after a fight which lasted for several months, and in which the Aberdeen line lost, according to> the press, from £30,000 to £40,000, thelatter was compelled to capitulate. And to-day, although the Aberdeen line is allowed to go on from Sydney to 'Brisbane- and ship other commodities, it is not allowed to take an ounce of meat away from Queensland. It will be seen that the combine interferes very largely with the progress and development of the meat industry, to the detriment of that State. Under these circumstances, we naturally think that it is an evil which ought to be abolished assoon as possible.

Mr Thomas - It is very nearly a monopoly.

Mr McDONALD - At the present timeit is practically a monopoly, and one which is acting detrimentally to the best interests of the Commonwealth. The combine has alsothe right to regulate freights. It may be argued that, if too high a rate be fixed, other steamers may come along and takethe commodities at a lower rate. But that is not so simply done, because the combine has the shippers in the hollow of its hand. In other words, it retains, in the shape of rebates, enormous sums, which the shippers would lose if they were to ship by other vessels. Under these circumstances, we can honestly say that the combine is an actual monopoly at the present time. Vear after year, as the volume of trade increases, the amount of rebate also increases, and the power of the combine becomes more complete and effective, and therefore a national line of steamers ought to be instituted. For a moment I wish to refer to the monopoly along the coast, and to indicate the evils which, in my opinion, justify our recommendation. On the Queensland coast there is a shipping monopoly as great as, if not greater than, any oversea monopoly affecting the transport of our produce, with the result that industry there is hampered in every way possible. I wish to place the House in possession of an incident which shows how, by means of the rebate system, this combine has been able to materially injure so important a town as Maryborough, where, as honorable members knew, many of the locomotives in use on the Queensland Government railways have been made, where there is one of the biggest timber industries in the State, and where other industries also flourish. A firm of sawmillers there - Messrs. Hyne and Son - had a contract to supply timber to Sydney, and for its conveyance secured two small vessels, the Mayflower and the Hopewell. It was, of course, necessary for them to obtain back-loading from Svdney; but they found it almost impossible to do so, because persons who wished to send goods to Maryborough were afraid to consign by their vessels, for fear of losing the rebates due to them in connexion with consignments by the vessels of the combine. Messrs. Hyne and Son therefore purchased a quantity of flour, bran, and cement, and, I think, pig iron, and, sending this to Maryborough, gave it to a commission agent to sell. It is well known that business men, when a lange quantity of a commodity is thrown on a market, buy largely in order to protect their own interests, so that the public may not be able to supply their requirements at wholesale prices. Therefore, when these goods were offered at auction at Maryborough, a number of the merchants there purchased them. For doing so, however, they were threatened by the shipping combine with the loss of their rebates, and were allowed to keep these rebates only on condition that they promised to refuse to purchase anything more carried by the vessels of Messrs. Hyne and Son. In the case of a baker who had obtained flour from Sydney by one of those vessels, the combine went so far as to say that it would not carry any more goods for him. In making these statements, I am not dependent for my information on mere idle rumour, but am supported by the evidence given on oath before the Shipping Commission. I have, moreover, copies of the original letters which passed during the transactions. Messrs. Hyne and Son tried to come to terms with the combine, and in regard to the negotiations write as follows : -

At the inception of our trade with Sydney the representatives of the combine here called 00 us, and wanted to know on what terms we would agree to work with them, that is, not to carry cargo backwards. To this we agreed to accept a low minimum back freight in instance of each of our vessels, 50 tons for " Mayflower," and 100 tons for " Hopewell," which we were prepared to carry at 10s. per ton, and as the rate of combine in the main is 17s. 6d. per ton this left them with a profit of at least 5s. per ton after they paid rebate to their customer of 10 per cent.', and paid what little labour was incurred in taking delivery at this end. But this did not suit the combine ; they wanted the whole of coastal freights to be entirely in their hands. Subsequently to this we made them still more reasonable offers, which they rejected.

The action of the combine has been to put an end to what might have been a flourishing trade between Maryborough and Sydney, where there is always a great demand for timber, importations to meet it being made from other parts of the world. Such a trade would have benefited the people of Maryborough and of the Commonwealth generally. An even more serious case occurred in connexion with a quotation for silky oak logs. Messrs. Hyne and Son desired to obtain a number of these logs from Northern Queensland, where the tree flourishes, the timber being sent from there to various sawmills to be cut up. Messrs. Burns, Philp and Company, however, exercise a great influence up north, because of their stores and other establishments in different centres, and, to a large extent, the business of the timber -getters is in their hands. Therefore, when Messrs Hyne and Son asked for a quotation of prices, they received the following letter: -

We are duly in receipt of your's of the 22nd inst., and now beg to confirm our wire, advising that we had asked Mr. James Lyons to quote you for Silky Oak Logs, which we understand he has done. We may state that we are unable to quote for shipment by any other than the Associated Company's steamers, otherwise we should lose our accrued bonuses with those companies.

It is extraordinary that such things can happen in a democratic country like Australia, where everyone speaks about the liberty and freedom which we enjoy. A combine such as I have been describing can wield enormous power, and can, as I have shown, practically bring about the ruin of an important industry. In addition to what has been done in regard to the timber industry, I would point to the action of the shipping combine in connexion with the carriage of pig-iron for Walkers, Limited, at Maryborough. The combine have laid down freight conditions which operate to the serious disadvantage of those who are engaged in carrying on industries at all our Queensland ports. The moment that they obtain full control of the situation - and they have almost succeeded in ousting all competitors - they will be in a position to dictate any terms they please, and to compel the public to pay exhorbitant rates for the carriage of their produce or of the goods which they may require for manufacturing or other purposes. The present position of affairs is a public scandal, and the sooner an improvement is effected the better it will be for the Commonwealth. All honorable members who have spoken during this debate have expressed the opinion that monopolies and combines are bad. It is well known that, in connexion with the oversea trade, the reduction of the freights upon our perishable products has been of great advantage to our producers, and has placed them in a much better position than they occupied some years ago. This reduction was brought about only when a few outside firms came along, and captured a. certain amount of the trade, in spite of the combine. Then the companies that were carrying on the contest against the combine became so strong that the shipping ring were compelled to take them into the fold, with the object of again increasing freights in order to recoup themselves for the losses sustained. When Mr. Kenneth Anderson was giving evidence before the Commission, I asked him if it would be possible for a competing firm to join the shipping combine, if it so desired. He replied that it would all depend on the financial strength of the firm. In other words, he conveyed the impression that if a firm were sufficiently strong to fight the combine, the latter would be prepared to accept it as a member of the shipping ring, whereas in a case such as that of the Aberdeen line they would dictate their own terms.

Mr Wilks - The party to which the honorable member belongs is a combine.

Mr McDONALD - It is a benevolent combine. The Commission contend that if we were to run our own line of steamers we should be able to provide employment for our own citizens under conditions very different from those mentioned by the honorable member for Melbourne. We should also be able to give our employes reasonable wages, and would be able to afford a desirable outlet for our young men who have a liking for a seafaring life. I think, moreover, that if we had a Commonwealth fleet, our citizens would display more interest in maritime life generally. It is desirable that this interest should be encouraged, in order that we may be enabled to train officers and men to man an Australian Navy when the conditions are ripe for the maintenance of such an institution. We should also be in a position to assist our producers to place their produce upon the markets of the world to greater advantage than at present. We could provide them with a more regular and rapid means of transit than they have enjoyed in the past. This is a matter of special importance to our butter and fruit industries. If we had a fleet of our own we should advertise Australia, perhaps, more effectively than by any other means. As the honorable member for Barrier pointed out, we should have at our hands a means of introducing our best products in the way of fruits, preserves, and meats, and this in itself would probably lead to the opening up of fresh markets.

Mr Thomas - What about our wines?

Mr McDONALD - Although the members of the Commission were almost without exception teetotallers, they did not lose sight of the fact that we might provide passengers by our steamers with wines grown in the Commonwealth, and thus introduce the product of one of our staple industries to the favorable notice of the outside world. We were told that if we established a Commonwealth-owned line of steamers we should have to fight the Shipping Conference. I do not believe that that result would be brought about, because the Shipping Conference would realize that if the Commonwealth once embarked in such an enterprise it would have to go on with it. They would appreciate to the fullest extent the distinction between the Commonwealthand, say, the Aberdeen line, and would realize that if they once entered into a fight with us they could not expect to sweep us from their path within a few months. No people worthy of the name would allow any combination to exist within the Commonwealth which was greater than the Commonwealth itself. Under these circumstances, I contend that no shipping ring or combination would attempt in any shape or form to fight the Commonwealth. We have been told that if the proposed new mail contract be ratified the contractors will establish a new line of steamers to fight the combine. If they can form a company and expend £3,000,000 or £4,000,000 in constructing a fleet of steamers, and if they can afterwards establish a remunerative trade with Australia, why in the name of common sense cannot the Commonwealth do so ? We have been assured by the honorable member for Parramatta that whilst it is true we can purchase the services of men who are qualified to run a national fleet of steamers, those men would not devote the same energy to their task that they would exhibit if they were employed by private enterprise. The Shipping Commission were informed by Mr. Kenneth Anderson that we should require to engage the services of men who are familiar with every phase of shipping, in order to insure the running of a Commonwealth line of steamers as economically and profitably as possible. We all realize that. But the Commission were also informed that these men could be obtained if we were prepared to pay them reasonable salaries. I contend that it is only natural that the Commonwealth would secure the best available talent. Is it not reasonable to suppose that the men who would be placed in charge of a national fleet of mail steamers would - for the sake of their own reputations - do their best to make it a success ? Would they not endeavour to make it successful because of the emoluments which would attach to their positions? Here in Victoria have not the Government imported a gentleman to take charge of the railways?

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - And to run them as private railways are run elsewhere.

Mr McDONALD - Just so. We require the services of men to run a national fleet of steamers upon similar lines.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The honorable member's party would not let them do that.

Mr McDONALD - Are the Railways Commissioners not allowed to do that in

New South Wales? Is it not a fact that last year those gentlemen returned to the Treasury of that State £300,000 or £400,000 owing to their magnificent management ?

Mr Wilks - They have made a mess of things in New South Wales.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - It was owing to the magnificent seasons.

Mr McDONALD - The railways were paying before the drought occurred in New South Wales, and in one year the Commissioners returned a profit of nearly £250,000 to the Treasury. When the drought took place they showed their sagacity by carrying fodder for starving stock at extremely low rates, in order that they might save that stock in the future interests of New South Wales.

Mr Watson - A private company made more money in that year than in any other year of its history.

Mr Wilks - A Royal Commission has recommended that the Railways Commissioners in New South Wales should be got rid of as quickly as possible.

Mr McDONALD - The honorable member for Parramatta will agree with me that the late Mr. Eddy made the New South Wales railways a financial success.

Mr Wilks - And who gave him a very bad time?

Mr McDONALD - Providence stepped in and gave him a very bad time.

Mr Wilks - The Socialist party were always tormenting him.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - And if they had had the power they would have hunted him away.

Mr McDONALD - Mr. Eddywas a strong man, and I regret that we have not a dozen more like him to take charge of other national enterprises.

Mr Wilks - If I recollect rightly, the honorable member's own leader voted against Mr. Eddy's salary upon the ground that it was too high.

Mr Watson - I do not think so. If I did, I soon found out my error.

Mr Wilks - Now I come to think about the matter, T. know that the honorable member did not vote in the way that I indicated, although the majority of the Labour Party did.

Mr McDONALD - It is only reasonable to suppose that whoever was intrusted with the work of running a national line of steamers would do their best for the Commonwealth, if only to save their own reputations, and to retain their positions. I have already referred to the fact that the establishment of a Commonwealth fleet of mail steamers would be the means of providing a large number of our citizens with a maritime training. The serious decrease that has taken place in the number of British sailors in our mercantile marine is sufficient to make us pause and think. I find that in1860 the total shipping tonnage of Great Britain was 4,257,739 tons, whereas in 1900 it was 10,550,094 tons. The number of British seamen during those forty years increased from 157,112 to 175,532. In the former calculation the masters and officers have been excluded, and in the latter they have been included. In1860 the British mercantile marine employed 14,280 foreigners and 335 lascars, whereas in 1890 their numbers had increased to 36,893 foreigners and 36,023 lascars, or a total of 72,916. In other words, the proportion of foreigners and lascars to British seamen in1860 was 9.3 per cent., whereas in 1900 it was 41.78 per cent. Here we have a clear proof that in running oversea ships, private enterprise will employ the cheapest labour procurable. That point is worthy of special notice by those who favour the repeal of the section in our Post and Telegraph Act which prevents our mails being carried by vessels which employ coloured aliens. The fact that the number of lascars engaged in the British mercantile marine has increased from 335 to 36,023 during the past forty years should be taken into consideration. The establishment of a Commonwealth line of steamers would tend to minimize that evil.

Mr Johnson - If the British authorities made a similar proposal in their postal contracts with regard to white labour, that difficulty would be largely overcome.

Mr McDONALD - I admit that the British Government have not made a similar proposal, but they are in a different position. At present they are deriving a very large revenue from a portion of the Empire, which comprises a coloured population of something like 350,000,000. In the circumstances, we are not compelled to give the same recognition to those coloured people.

Mr Johnson - Nevertheless, the question is one into which the British Government will have to look very seriously.

Mr McDONALD - That is so. I do not propose to deal with the figures advanced by the Commission in support of their recommendations, for they have not been seriously assailed.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - It is just as well not to deal with them, because they constitute the main feature of the report.

Mr McDONALD - No honorable member has seriously assailed them.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Why need we do so when the Commission themselves assail, them?

Mr McDONALD - The only newspaper which seriously endeavoured to challenge them was the Age, but after the speech made by the honorable member for Barrier in support of his amendment, it gracefully backed down. That speech was a complete refutation of the criticism levelled at the report.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - But the members of the Commission themselves say that they are only guesses.

Mr McDONALD - It is true that some of the figures may be, so to speak, slightly experimental, but in the main they will withstand all criticism. Some honorable members say that the amendment is an excellent one, but that it is inopportune. Had the honorable member for Barrier failed to take advantage of the present opportunity, he would have been unable to submit his proposal with the prospect of its being carried into effect until this contract had expired. I, therefore, hold that the course he has taken is a proper one. Before passing from the report of the Commission to other matters, I would say that, when the terms of this contract were published, Mr. Denham, Minister of Agriculture and Secretary of Railways in the Government of Queensland, said that he objected to it, and that he felt that that State was being bled in connexion with it Whilst I personally approve of the Government inserting in the contract a clause compelling the mail steamers to go as far as Brisbane, I regret very much that Mr. Denham, or some other member of the Queensland Ministry, failed to place before the Shipping Service Commission evidence showing the situation in which Queensland was placed in connexion with the Orient Company's contract. Before proceeding to Brisbane, the Chairman of the Commission - the honorable member for Barrier - wrote to the Government of Queensland, asking if any members of it were prepared to give evidence, and the then Premier, Mr. Morgan, replied that they were. When we reached Brisbane, however, the Chairman received a telephone message from a Government officer that it had been decided that no member of the Ministry would give evidence, but that, if we desired it, a State official would be prepared to give' evidence. Such a witness would, doubtless, have given us some official and stereotyped answers to any questions submitted to him ; but we wanted something more. Our desire was that a member of the Government should come before the Commission, and give us some idea of what, in their opinion, should be done in regard to the calling of the mail steamers at Brisbane. Although Queensland was vitally interested in the carriage of mails under future contracts, not one member of the Government was prepared to give evidence before the Commission. I regret this, not merely because I was a member of the Commission, but because, as a representative of Queensland, I wished my fellow Commissioners to learn how unjustly Queensland was treated in being called upon to pay £26,000 per annum to secure the calling of the Orient Steam-ship Company's mail steamers at Brisbane. In the circumstances, it illbecomes any member of the Queensland Ministry to find fault with anything that is being done in regard to the mail contract. We have been told bv the PostmasterGeneral that this is to be an Australian company ; but he did not tell us to what extent it could be so described. All that we are told is that the company is to be registered in Australia, All that we can gather from the statement of the Minister, and the other information placed before us, is that we are to give a concession to certain persons who will subsequently' form a company, which, if successful, will build a fleet of steamers and carry out the terms of the contract. We are also told bv the Postmaster-General that the gentleman who has signed this contract has given a guarantee to the extent of £25,000. but, having regard to the fact that the building of this fleet of steamers would involve an expenditure of about £4,000,000, that is a very insignificant sum. I would draw the attention of honorable members to an incident which took place in Queensland some time ago. A certain company desired a concession for the construction of a railway from Normanton to Cloncurry. We were told that this concession was not going to be hawked round London or anywhere else, but that the financial magnates interested 'in the company were in a position to put down (he £4,000,000 necessary to build the line, and to carry out other works in connexion with the scheme. That was the argument used to induce the members of the State Parliament to vote for the granting of the concession, and in the same way the Postmaster-General has said that the company proposing to take up this contract could build the necessary steamers, and carry out all the conditions, without appealing to the public. The concession was granted, in addition to which five or six other concessions were granted to different companies to build various lines of railway. Although those companies put down sums varying from £2,500 to £"10,000 by way of guarantee, not one of the railways has been built up to the present time. I should like to warn the Postmaster-General that,, a guarantee of £25,000 is, in my opinion, insufficient under the circumstances, for the reason that,' if the company fails within a reasonable time to give some guarantee that the vessels will be built, and if the contract is not proceeded with, the Commonwealth will be involved in a loss of, perhaps, -£50,000 or £100,000. The historical incidents to which I have referred are therefore worth remembering. It behoves us to think very seriously before we enter into the contract now proposed. We should have some guarantee that the scheme is not going to be hawked around London, so that a company may be formed, or mav be attempted to be formed, with the consequence of landing us ultimately in a serious difficulty. We are told that this is to be an Australian company, and that the ships are to fly the Australian flag. What is the use of their flying the Australian flag and being registered in Australia if the shares are held in London? In Austria-Hungary the Government insists that at least two-thirds of the shares of any company subsidized by the State shall be held in the country, and by Austrian subjects. Germany goes even further. In Japan the Government refuses to grant a concession to any company the shares of which are not held by Japanese. In America the conditions are still more stringent. Before we can call this an Australian company, at least two-thirds of the shares should be held in Australia. A clause should be inserted to provide that not only the shipment of all crews, but their discharge, shall take place in Australia. That would make the company a little more Australian than it will be under the agreement as it stands at present. With such an amendment the contract will be improved. But I regret very much that the Government has not seen its way clear to accept the amendment of the honorable member for Barrier.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The honorable member's own party is not solid upon it.

Mr McDONALD - I cannot help that. J can assure the honorable member that the members of the Royal Commission are very solid. Combines, not only in the coastal trade, but in the oversea business, are all-powerful to-day, and do very much to retard the development of Australia. The only method by which those combines can be induced to take a reasonable view of their duties, instead of fleecing the public of Australia, is by adopting some such proposal as that of the honorable member for Barrier to nationalize the shipping industry. We should thus create an enormous influence in favour of Australia. To have a fleet such as is proposed by the Royal Commission sail from our ports to other parts of the world would be one of the biggest and best advertisements we could possibly have.

Mr. DAVIDTHOMSON (Capricornia) £9.36]. - I do not rise to congratulate the Government upon this new contract. On iiie contrary, I think thai, if it is ratified, it will inflict a flagrant piece of injustce upon Queensland, and will do more damage than any honorable member contemplates. In the fust place, the Postmaster-General has told us that this is a mail contract pure and simple. If that be so, why is there n clause in it requiring that the ships shall be of the size of 11,000 tons? It is not necessary to have vessels so large simply to carry mails to England. It appears ro me that there is something behind the proposal. It must be admitted that they must do other work. They must come to Melbourne and Sydney, where the large centres of population are situated, for tiade purpnses. The carriage of mails alone would not pay a fleet of this character. The amount they received for that purpose would only barely pay interest on the .>utlay. Under the proposed contract only two States of the Commonwealth will have the ships calling at their ports, namely, Western Australia and South Australia. Much was said some time ago about the contract with the Orient Steam Navigation Company, which we then had before us, nnder which the Commonwealth Government contracted to pay £120,000 for the carriage of mails. But now the Government is to pay £125,000. The Orient

Steam Navigation Company not only calls at Melbourne and Sydney, but also goes on to Brisbane. Under this contract the voyage of the steamers will terminate at Adelaide. There is nothing to compel them to go elsewhere. It is true that we shall secure some advantage in a shortening of the time of the voyage; but the great masses of the people care nothing about the saving of a few hours. They do not know when the English mail either leaves or arrives in Australia. They do not feel much interest in it. Only a few people like the richer merchants, and those who wish to communicate with Europe, are interested in the speed of the mail boats. Wc cannot afford to allow this country to be muJct in a further expenditure of £5.000 to save a few hours. There is much to be said about the contract from a monetary stand-point. The present mail service is, in my opinion, just as good as the new service will prove. I see very little in the condition that the vessels shall be registered in Australia and fly the Australian flag. That may be all verv well from a patriotic point of view; but I, as an Australian, do not attach much importance to the stipulation. Personally, I would just as soon see the English flag continue to flv over the mail steamers until the time arrives when we have vessels of our own over which to fly our flag, As to the calling of mail steamers at Brisbane, I know there are at present negotiations goinsr on between the Premier of Queensland and the Prime Minister as to what the extension of this facility would cost. So far, I understand that Messrs. Lang and Sons Ltd', have asked for an extra subsidv of £26,000 per annum ; but I think that the Queensland Government would be exceedingly foolish to fall in with any such idea. I know that to-morrow I shall_wire to the Premier of Queensland' advising him to have nothing whatever to do with such a proposal, which I regard as an injustice to the northern State. Sydney, and all the other Australian ports are bound to be visited' bv the mail steamers for the purposes of trade, and yet Queensland is to be left out.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - We are not aware that the Premiers of any of the States have been consulted.

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